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INDIA AND AFRICA ECONOMIC RELATIONS SINCE 1991

INTRODUCTION
Peoples of Africa and India represent a third of humankind. They have known each other since
ages. As victims of exploitation and injustice in the colonial era, they were linked through mutual
empathy and a common goal, namely freedom from domination and discrimination
(http://www.mea.gov.in). The India-Africa relationship is distinctive and owes its origins to a
common past that they share a past that witnessed a struggle against colonialism, poverty and
illiteracy. India and the African nations have been building strong and mutually beneficial
associations since long. India established its trade relations with the African countries as long back
as in the 16th century. As emerging economies, India and Africa have a lot in common- rich natural
resources, similar demography and large domestic markets. This provides a natural synergy for
building partnerships. The first large-scale Afro-Asian conference took place during April, 1955 in
Bandung, Indonesia. The twenty nine countries, which participated at the Bandung Conference,
represented nearly one fourth of the Earths land surface and a total population of 1.5 billion
people. The conference was organized by Indonesia, Burma, Pakistan, Sri Lanka and India. In
1964, a bilateral programme of financial assistance and mutual cooperation developed, to benefit
both India and Africa, was taken care of through the Indian Technical and Economic Cooperation
(ITEC) programme. This programme was a visible symbol of Indias role and contribution to
South-South Cooperation. During the 1990s increased focus was laid on Indo- African economic,
education and technical cooperation. In recent times, they have struggled together for attaining
socio-economic development and a just global order. However, their relationship is marked by
awareness deficit and gaps that need to be addressed. Of the three pillars of Africa-India
engagement, namely Government-to-Government (G-to-G), Business-to-Business (B-to-B) and
People-to-People (P-to-P) ties, the third pillar is unique in many ways. It dates back to prehistoric
times; and it has immense potential for expansion in the future. (http://www.mea.gov.in).
In recent years, Indias economic partnership with the African countries has been lively, extending
beyond trade and investment to technology transfers, knowledge sharing, and skills development.
Persistent efforts are being put in at the government level as well as the private sector level, for a
comprehensive engagement, to march together as partners in progress. (African desk,pp-1-2) The
First India-Africa Forum Summit in 2008 at New Delhi was a momentous stride in that direction.
Conclaves and meetings held in 2009 and 2010 were the signs of enthusiasm to nurture a strong
relationship. The India- Africa Business Partnership Summit I (2009) organised by FICCI, played a
crucial role in this direction. The stage for a dynamic engagement between India and Africa was

further set at the 2nd India- Africa Forum Summit held in Addis Ababa, Ethiopia in May 2011. The
India- Africa Business Partnership Summit II, organised by FICCI, during October 2011, also
played a catalytic role in the vibrant relationship between India and Africa. (African desk ,pp-1-2)
The India-Africa economic and trade relations have witnessed a surge, from a modest level of US$
24.98 billion in 2006-07 to US$ 53.33 billion in 2010-11. The total trade between the two grew at a
compounded annual growth rate (CAGR) of 20.87% during the same period. Furthermore, bilateral
trade between India and Africa is expected to reach US$ 70 billion by 2015. On the other hand,
over the past two decades, foreign direct investment (FDI) has become a vital source of economic
development for Africa. India has been present in Africa for decades with its FDI, mostly in the
services and manufacturing sectors. India, now the worlds 21st largest outward investor, is the 9 th
largest source of FDI into Africa. Indian multinational enterprises (MNEs) are seeking more
strategic investments in emerging markets, particularly in Africa. The collective GDP of African
countries in 2008 was almost US$ 1.5 trillion, approximately the same as that of Russia or Brazil.
By 2020, the collective GDP of the African countries is estimated to increase to US$2.6 trillion.
The real GDP has risen to 4.9% per annum between the years 2000 to 2008, which is more than
double that of the 1980s and 1990s. Real GDP growth rose from 3.1% in 2009 to a level of 4.9% in
2010. The same is projected to grow at 5.8% in 2012, despite falling to 3.7% in 2011. Although
there are a few factors that can arrest the growth of a country, but therealso exist several trends
indicating steady long term growth prospects in the continent.(African desk ,pp-1-2)
The India-Africa Strategic Dialogue is particularly important. If the period till the 80s of the last
century was ruled by the Atlantic Ocean, with the focus shifting towards the Asia-Pacific Region
from the mid- 70s, then one could confidently foresee that the coming decades of the 21st century
will belong to the Indian Ocean Region and Africa. This is an area of great strategic significance
drawing the attention of every significant global player. In this context, the Indian Ocean RimAssociation for Regional Cooperation (IOR-ARC) assumes a particular importance. India assumed
the chairmanship of this Association in 2011. This organisation had been dormant thus far. It is our
aim and intention to reinvigorate this organisation for the larger good of the countries of the region
and particularly Africa, as a significant membership of this Association is drawn from the African
continent. Indias partnership with the countries of Africa rests on a firm historical foundation of a
shared colonial past and similarity of post-independence development experience. The Indian
struggle for Independence found a greater resonance after Mohandas Karamchand Gandhi went to
South Africa and from there returned to India as Mahatma Gandhi. The presence of the Indian

Diaspora in Africa could be seen to have commenced from Southern and Eastern Africa over 250
years ago with a larger number of its people moving towards that continent around 200 years ago.
Our identification with issues affecting Africa was evident when India even before it became
independent imposed sanctions against the apartheid regime in South Africa. The AFRICA Fund
further closely identified India with Africas struggle against colonialism and apartheid as the
acronym AFRICA stood for Action for Resisting Imperialism, Colonialism and Apartheid. This
Fund, in fact, was crystallised in New Delhi in 1986. Indias association with Africa is marked by
consultation, responsiveness and mutual appreciation of each others capabilities and constraints.
Today, both India and her African partners realise that they are witnessing an extremely robust
phase of their association. The new chapter that has been opened in the relationship between a
resurgent Africa and a rapidly growing India is anchored in the fundamental principles of equality,
mutual respect and mutual benefit. While India and Africa have come a long way, we both face
daunting challenges of poverty, hunger and disease. We have no doubt, however, that by working
together, India and Africa can set an example of fruitful cooperation in the developing world and
naturally where there are challenges, there are opportunities. (M.Ganapati, PP.1-4)
Indias vision of a partnership with Africa for the 21st century goes beyond the already strong
bilateral relationships and envisages closer cooperation with the African Regional Economic
Communities (RECs) as well as the African Union. The wide ranging cooperation and
development partnerships between India and Africa encompasses, amongst others, the fields of
human resources and institutional capacity building, science & technology; agricultural
productivity and food security; industrial growth; development in the health sector; nfrastructure
development; and Information and Communication Technology. This development of a three-tiered
cooperation structure between India and Africa, which began with the First India Africa Forum
Summit in New Delhi in April 2008, was further reaffirmed at the Second Africa India Forum
Summit in Addis Ababa in May 2011. This new framework takes into account Africas own
aspirations for pan- African institutions and development programmes. The Delhi Declaration of
2008; the Addis Ababa Declaration of 2011; the Africa India Framework of Cooperation of 2008;
and the Africa India Framework of Enhanced Cooperation of 2011 bear testimony to this fact.
Indias partnership with Africa has been consultative, responsive and focused on capacity building
and human resource development. The India-Africa partnership is also geared towards socioeconomic transformation. Indias commercial engagement with Africa is primarily driven by the
private sector and the recent years have witnessed a surge in Indian investment in Africa along
with an impressive growth in our two-way trade. It is also encouraging to witness an increase in
African exports to India, and in this regard, the Duty Free Tariff Preference Scheme announced by

India for the Least Developed Countries has begun to bear fruit. The development of infrastructure
is a priority for Africa. (M.Ganapati, PP.1-4)

In this context, India is contributing towards establishing a new Ethiopia-Djibouti rail network
through a line of credit worth US$ 300 million. The role of the private sector in the
operationalisation of some of the letters of credit needs no emphasis. While there have been
political engagements with Africa over the years, the emphasis, however, has moved towards
economic interaction. There is a felt need for greater engagement between India and Africa on
issues of a geo-strategic nature. India has always been keen to cooperate with Africa on issues of
global security. An important example in this regard relates to India being at the forefront of the
global efforts against piracy off the coast of Somalia.The Indian Navy has been extensively sailing
the waters of the Indian Ocean providing for EEZ Surveillance and anti-piracy patrolling to some
of the countries in Eastern and Southern Africa.In the area of defence cooperation, the Indian Navy
is extensively involved in the Indian Ocean region. The IBSAMAR was an important maritime
activity involving the three IBSA countries of India, Brazil and South Africa. India has carried out
extensive hydrographic surveys for countries in the region. These have been beneficial for these
countries helping them in their EEZ claims. Besides piracy, another common threat facing India
and Africa has been that of terrorism. The countries in Africa and India are naturally concerned
about this menace. One important organisation which has played an important role between India
and Africa has been the IBSA. This association bringing together India, Brazil and South Africa
has a crucial role not only globally but also in Africa where the IBSA Trust Fund has been used
towards providing in the developmental activities of developing countries in the region. India fully
acknowledges the support received from our African partners in getting the country elected as the
non permanent member of the UN Security Council for the period 2011- 12. India has never shied
away from assuming roles of responsibility when it comes to issues related to Africa in the global
fora. Owing to their rising global politico-economic profile, both India and Africa are justifiably
expected to highlight the concerns of the developing world at various international fora. This
shared responsibility calls for a greater understanding of each other and synchronisation of our
views and response to a variety of global issuesthat may have a direct bearing on the development
prospects of our peoples (M.ganapati, PP. 1-4)
CHAPTER 1: TRADE AND INVESTMENT

Trade with Africa


In recent times interaction in economic cooperation has emerged a significant channel of
Collaboration and a major factor for enhancing cooperation between Africa and India. The major
factor for rise of global market in Africa and Indias booming products have led the leaders and
diplomats to scrutinize the economic relation between these two countries. To reiterate, trade ties
between India and Africa chart a long and distinguished history. These go back thousands of years
to the days when Indian traders, using the seasonal monsoon winds, sailed to the East African
Coast in search of mangrove poles, elephant tusks, and gold and gemstones that made their way up
from what is now Zimbabwe. This intensified with the establishment of Omani suzerainty in the
17th century over Zanzibar and its hinterland. There was also the large immigration of Indian
labour during the colonial period, brought over to work on the railways in East Africa, and on
sugar and other plantations in Mauritius, Madagascar and Southern Africa. Many descendants form
the bulk of the Indian diaspora in Africa today. As the population of the diaspora grew, so did trade
between their original homeland and their new-found habitat. Indians became critical links in the
export of African commodities such as tea, coffee and cotton and the import of manufactured
goods and grains such as rice, pulses and textile. Since independence, India has had cordial and
friendly trade relations with Africa in general. Trade relations have expanded considerably since
1947, particularly after the transition into the 2nd millennium. Moreover, the bilateral trade
touched yet another milestone at the onset of globalization (www.ijsrp.org). Additionally,
economic relations between the two countries have grown many-fold as a consequence of
formalisation of diplomatic relations between the two, in 1993.
Indias trade relation with Africa took a new direction when Indian Foreign Trade Policy (IFTP)
2002-07 came along with a programme of Focus Africa, under the EXIM Policy 2002-07.
Government of India launched this Programme in 2002-03 to increase the inter-state interaction,
specifically, with the Sub-Saharan Africa region), by identifying potential areas of bilateral trade
and investment. Target countries identified during the first phase of the programme included
Mauritius,

Kenya

and

Ethiopia

(file:///C:/Users/DELL/Desktop/dissertation/India-Africa

%20Trade_%20Gaining%20Momentum.html--). The Focus Africa programme's commercial


focus is expansive and beyond regular fiscal incentives, whereby export promotion activities are
conducted by various export promotion councils and business associations with grant under
Market Development Assistance (MDA) and Market Access Initiative (MAI) Schemes. It was a
part of a larger Indian strategy to diversify trade relationships beyond traditional markets.

(International Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014 3
ISSN 2250-315, PP-1-7, www.ijsrp.org).
More recently, India - Africa trade has grown significantly in the last decade (FICCI Africa
Desk ,PP-3-5). This upward trend in bilateral trade is partly the consequence of Indias duty-free
tariff preferential scheme for 49 least developed countries (LDCs), which was announced in April
2008, and which has benefited 33 African countries (International Journal of Scientific and
Research Publications, Volume 4, Issue 3, March 2014 3 ISSN 2250-315, PP-1-7, www.ijsrp.org).
Since 1990s trade between india Africa increased. Major exports from india was engineering
goods, textiles,

vehicle, oil etc. .apart from these indian companies like Arvind

pharma,Cipla,Encure and Ranbaxy have established themselves in most of african markets .India
exports from Africa cashew nuts, high quality crude oil, petroleum products, precious metals etc
.In the last decade india has launched a no of initiatives to promote trade with Africa not only
public sector but private sector olso has pitched into African markets both sectors have adopted
wide range like The association chambers of commerce and industry ,the confederation of Indian
Industry, the federation of Indian chambers of commerce and industry. India has made extensive
investments in Africa and its expanding beyond its traditional commonwealth partners.in 2002
Indian enterprises had a total of 33o million invested in 43 projects. Indian companies are also
active in chemical ventures Morocco & Tanjania, coopermines in Jambia , oil in Mauritius,
telecommunication in Malawi. In Uganda India is now 3 rd largest source of FDI..these lead to
stronger relations between India and Africa..

India-Africa Trade
The bilateral trade has witnessed a massive growth from a mere US$1 billion in 1990 and 1995
(file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_%20a%20unique
%20relationship.html) to US$3 billion in 2000, reaching up to the level of US$ 36billion in 200708 and climbing up high to the level of US$ 70 billion in 2012-13 (International Journal of
Scientific and Research Publications, Volume 4, Issue 3, March 2014 3 ISSN 2250-315, PP-1-7,
www.ijsrp.org). Bilateral trade between 2003-04 and 2008-09 alone increased threefold, from $2.5
billion to $7.5 billion. In January 2011, following a visit by Indias commerce and industry
minister, Anand Sharma, to South Africa, an unprecedented new bilateral trade target of $15 billion

by 2014 was agreed upon (file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_


%20a%20unique%20relationship.html).
Table 8.18
India Africa Trade
(Value in US $ million)
Year
2005-06
2006-07
2007-08
2008-09
2008-09
(April-Sept)
2008-09
(April-Sept.)*
*
**

Exports**
5441.70
8407.53
11539.56
11390.81

Imports
4041.38
11362.76
14927.98
18904.35

6745.16

11961.03 18706.19

4912.34

8656.61

Including

Source: DGCI&S
CHART 8.4

Total Trade
9483.08
19770.29
26467.54
30295.16

13568.95
Provisional

Petroleum

Product

Exports

from

India

Indian exports to Africa


Africa imports products that support the fundamental economic activities of the African countries,
such as transportation and communication equipment. Food products, FMCG, telecommunication
and pharmaceutical products are among the other significant imports. Besides these, the African
countries with their budding manufacturing sectors, increasingly import diverse component
products (FICCI Africa Desk, PP-3-5).
Table1
INDIA'S EXPORT TO AFRICA (US $ MILLION)
REGIO

2005-

2006-

2007-

2008-

2009-

2010-

2011-

2012-

N
North

06
1593.2

07
1861.9

08
2652.2

09
3422.6

10
3125.1

11
3985.8

12
4693.6

13
5681.8

Africa
West

1
1857.6

9
2446.7

6
3461.9

1
3357.0

8
3136.9

5
4296.6

3
6460.4

4
6523.3

Africa
Central

165.27

6
203.54

3
257.7

8
384.87

8
349.63

1
465.03

5
707.8

9
931

Africa
East

1437.4

2942.2

4214.1

4509.7

3512.1

5346.8

6594.2

8839.2

Africa

Southern 1940.0

2814.9

3605.7

3139.0

Africa
2
3
4
7
(source: http://commerce.nic.in/eidb/ergn.asp)

3308.9

5619.1

6217.9

7166.9

As can be seen from the data, Indian exports to Africa have been showing an upward trend since
the inception of Focus Africa programme. With around 30% share of total exports to Africa, East
Africa has been a major importer followed by Southern Africa (24.6 percent) and North Africa
(19.5 percent) in the year 2012-13. The East African countries share good trade relationship with
India and this is why, the region is the largest market for Indian goods. The major export items to
East Africa include, refined petroleum products, pharmaceuticals, industrial machinery, iron and
steel and sugar products. Ethiopia, a less developed country of the region has turned out to be a
major trading partner for Indian exporters investing primarily in sectors of agriculture and mining.
The Southern Africa accounting for around 24.6 percent share of total Indias exports to Africa in
2012-13, has seen a considerable rise in the exports from India. Southern African countries have
been importing refined petroleum products, automobiles, pharmaceuticals, electrical and industrial
machinery from Indian firms. Following Eastern and Southern counterparts, North Africa has also
been picking up pace when it comes to importing from India. In the northern region, Egypt has
come out to be the largest market for Indian goods. The major import items are automobiles,
electrical machinery and bovine meat. Turnkey Projects, refinery installations, gas pipelines,
transmission line and water supply projects are the major projects undertaken by Indian firms in
the Maghreb region. Central African countries account for less than 5 percent of India's exports.
However, the regions imports from India are on rise. The major export destinations in this region
are Angola, Cameroon and the Republic of Congo and demand is mainly for the items like
pharmaceuticals, refined petroleum products, vehicles and industrial machinery (International
Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014 3 ISSN 2250-315,
PP-1-7, www.ijsrp.org). Nigeria, South Africa, Kenya and Tanzania are the most important
destinations

for

Indian

products

in

Sub-Saharan

Africa

(file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_%20a%20unique
%20relationship.html).
Indias imports from Africa
Africa is one of the richest regions in the world in terms of natural resources. It has 10 percent of
the worlds oil reserves, 40 percent of its gold, 80-90 percent of chromium deposits to name a few,

with large tracts unexplored still. With increasing global demand for energy, Africa will remain
critical to the world economy. Not surprising then, that more than two-thirds of the total exports
from Africa to the rest of the world consist of primary commodities. The single largest exported
product from Africa is crude oil. Apart from this, several African countries export diverse mineral
and mining products, agricultural and fishery products. Of late, a few African countries have
started exporting manufactured products as well. South Africa, for instance, has emerged as an
important regional industrial hub, with increasing exports of manufactured commodities to the rest
of the world (FICCI Africa Desk, PP-3-5). For a good trade relationship to hold, India and African
countries shall provide goods and services to each other. This is why India cant just export its
merchandise and services to Africa. It shall also import and it does indeed.
Table 2: INDIA'S IMPORT FROM AFRICA (US $ MILLION)
REGIO

2005-

2006-

2007-

2008-09 2009-10 2010-11 2011-12

2012-13

N
North

06
837.17

07
3353.4

08
5,542.

5,823.9

4,899.6

5,894.4

7,405.8

6,723.3

Africa
West

1,161.

7
8,178.

93
9,726.

6
11,179.

6
9,864.2

0
12,862.

4
17,850.

2
16,264.

Africa
Central

99
19.36

06
29.05

27
49.24

37
153.06

4
270.43

57
45.74

58
85.63

44
230.12

223.73

234.42

321.14

353.43

388.49

579.73

542.87

1054.6

Africa
Souther 2,636.

2,921.

4,831.

7,218.4

10,191.

12,573.

17,980.

16,838.

23

33

94

98

70

20

Africa
East

31

Africa
(source: http://commerce.nic.in/eidb/ergn.asp)

As can be seen from the table 2, Indian imports from Africa have risen over the past few years. The
major exporter to India has being Southern Africa accounting for 41 percent of total imports from
Africa in 2012-13 followed by West Africa (39.5 percent) and North Africa (16 percent). Imports
from Africa are dominated by South Africa, the largest economy of Africa. The country is a major
exporter to India and mainly exports gold and coal. Besides fulfilling the demand of its wide
consumer base of gold, India has also been importing iron and steel, inorganic chemicals and
mineral ores from the country. With a share of about 40 percent, West Africas exports to India

have seen an upward trend. India is a major importer of crude oil from this region. Besides oil,
edible fruits and nuts, especially shelled cashews are significant import item. Following up the
footsteps of Southern and Western Africa, North Africa has also started developing trade relations
with India. Egypt, Algeria and Morocco could be seen as major trading partners. The import items
from North Africa mainly include fertilizers, inorganic chemicals and mineral fuel. Apart from
these, India has also been importing edible nuts, vegetables, iron and steel, coffee and inorganic
chemicals from East Africa and crude oil from Central Africa.
(International Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014 3
ISSN 2250-315, PP-1-7, www.ijsrp.org)
Indias trade deficit with Africa (2007-09)
According to the African Development Bank, Indias imports from Africa reached $18.8 billion in
2009 while exports from India to Africa were $13.2 billion in the same year
(file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_%20a%20unique
%20relationship.html).
Since 2007, India has been having a trade deficit that is primarily due to the import of mineral
fuels. In general, India has been exporting to Africa products such as, High Speed Diesel (HSD),
Aviation Turbine Fuel (ATF), medicines and pharmaceutical products, vehicles including motor
cars and motor cycles, electrical machinery & equipment, mineral/ chemical fertilizers, other
motor spirits, tyres used on buses/ lorries, printed books, polypropylene (a polymer used in a wide
variety of applications including packaging, textiles etc.), garments, fabrics, household articles of
stainless steel and so on. On the other hand, India generally has been importing petroleum oils &
oils obtained from bituminous minerals, crude and other non-monetary unwrought forms of gold,
coal, copper ores & concentrates, manganese ore, cobalt ores & concentrates, natural calcium
phosphates, ground and other different ores, slag and ash, nuts - fresh/dried-in a shell, phosphoric
acid, diamonds, unwrought silver, woods and articles thereof, coffee, tea, mate, spices and so on
( FICCI Africa Desk ,PP-3-5 ).
Oil being a central commodity shaping the economic relationship between Africa and India, merits
special attention. Mining and hydrocarbons are key drivers of Indian engagement in Africa.
According to South Africa-based Confederation of Indian Industry (CII), India is the worlds fifth
largest consumer of oil and will be in third place by 2030. With the projected rise in Indias
population and wealth, energy consumption levels are also predicted to double over the next two
decades. In addition, because of the lack of oil reserves, India is highly dependent on foreign

producers. Even within the crude energy suppliers, New Delhi is now eager to diversify its
portfolio, mainly by boosting the amount of oil it purchases from African countries. To this end,
India has been working hard to nurture its relations with major oil-producing African countries,
including Nigeria, Ghana, Equatorial Guinea, Cte dIvoire and Sudan. India also imports coal
from South Africa. Indias imports of crude oil from Africa have increased from 22 million
tonnes in 2004-05 to over 35 million tons in 2010-11, according to reports. India is also
increasingly interested in oil exploration on the continent. Exploration and production firm Cairn
India, for example, made its first overseas acquisition in August, when it purchased a 60 percent
interest in a gas discovery block on the South African west coast. Indian oil firms have also bought
into oil exploration projects in Nigeria and Libya. Africas nuclear energy potential is also driving
Indias interest in the region. Uranium mining, essential to power Indias nuclear energy sector, is
another area that has elicited great interest from Indian companies, notes the CII. India is
exploring uranium mining opportunities in Niger and Namibia. Likewise, Africa is an equally
important source for India of precious metals and gemstones, especially gold and diamonds. India
is the worlds major jewellery maker in 2008- 09, the gems and jewellery sector constituted 13
percent of Indias total exports. Furthermore, India is the worlds leading processor of diamonds,
accounting for 85 percent in terms of volume on the total world market. Gold in particular defines
Indias economic relations with South Africa, the latter being the worlds leading supplier of gold
(file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_%20a%20unique
%20relationship.html).
Investment relation between India and Africa
Africa, of late poised for economic growth, owes the trajectory to economic, resource and
operational factors. It is the third fastest growing economic region in the world. Soaring prices of
oil, minerals, and other commodities have helped lift GDP since 2000. On an average, Real GDP
during 2000-2012 rose by 4.48%, almost twice its pace in the 1980s and 1990s. In addition to the
surge in commodity prices during the last decade, the rise in GDP is accounted by various factors
including government action to end armed conflicts, improve macroeconomic conditions, and
undertake microeconomic reforms to create a better business climate. Africa has strong long-term
growth prospects, propelled both by external trends in the global economy and internal changes in
the continents societies and economies.
Over the years, African countries have emerged as the major reformers, trying to improve their
business environment as a strategy to attract more FDI. The World Bank Doing Business In
Survey for 2012 seen as a benchmark for rating the worlds business environments tracked

Morocco as the top reformer globally during the survey period, with Sao Tome and Principe, Cape
Verde, Sierra Leone and Burundi also among the top 10 reformers. Changes in domestic policy in
these countries improved the process of dealing with construction permits, protecting investors and
paying taxes, among other areas. Improved business climate, prudent macroeconomic and fiscal
policies, rising GDP and GDP per capita, increasing urbanization, improved infrastructure,
growing middle class and most importantly abundance of natural resources has made Africa an
attractive investment destination. The average annual FDI inflows in Africa increased from US $7
billion during 1990s to US $ 35 billion during 2000-2012. FDI inflows reached its peak during
2008, recorded at US$59 billion but subsequently declined for three years due to global financial
crisis (UNCTAD FDI STATISTICS). According to UNCTAD World Investment Report, 2012 the
decline in investment, from $43.1 billion in 2010 to $42.7 billion in 2011, was largely due to
reduced inflows to North Africa as social and political unrest in Egypt and Libya deterred
investors. However, inflows to Africa are expected to recover as a result of stronger economic
growth, ongoing economic reforms and high commodity prices, as well as improving investor
perceptions of the continent, mainly from other emerging markets (UNCTAD 2012).
INDIA FDI INTO AFRICA
The first OFDI in Africa was undertaken by the Birla Group in 1960s, when they established
textile mill in Ethiopia. Indias Africa is primarily driven by the formers reliability on natural and
energy resources supply, and the latters abundance in the same. It is also driven in the search for
newer markets. Indian OFDI outflows increased from US $243 million in 2000 to US $ 11 billion
in 2007 (UNCTAD FDI STATISTICS). Indian Investments in Africa stood at US$ 9.2 billion in
2008-09. According to IMF estimates, total Indian investments in Africa at the end of 2011 were
US$ 14.1 billion a share of 22.5 percent in total Indian outward FDI stock, making country the
seventh largest investor in the continent. Another estimate puts cumulative Indian investments into
Africa at over US$ 35 billion. Although outward investment data from India to Africa remains
sketchy, but upward trend in the same cannot be ruled out. (CII & WTO REPORT)
Indian FDI in Africa has traditionally been concentrated in Mauritius, taking advantage of the
latters offshore financial facilities and favourable tax conditions; as a result, the final destinations
of these investments have often been elsewhere. Indian investors have, however, been investing in
other countries in the region, too, such as Cte dIvoire, Senegal and Sudan. (UNCTAD 2012)
(International Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014 3
ISSN 2250-315, PP-1-7, www.ijsrp.org).

The trend of Indian investment in Africa is also positive. In South Africa, for example, cumulative
investment between January 1994 and January 2011 was around $212 million, and 102 Indian
firms are now in operation in the country. Overall, Indian investment in Africa is believed to be
around $33 billion. Dr Alex Vines, who heads the Africa Programme at Chatham House, believes
that we are seeing the beginning of an Indian re-engagement with Africa, which is private-sector
driven. Indian businesses have been telling Indias foreign ministry it needs to step up its presence
on the continent. The state appears to be responding. In the wake of a high-level visit led by
Indian Prime Minister Dr Manmohan Singh, a number of important development, investment and
trade deals have been signed.
(file:///C:/Users/DELL/Desktop/dissertation/India-Africa%20trade_%20a%20unique
%20relationship.html).

THE FICCI CONNECTION


FICCI works closely with African missions in India, Indian mission in Africa, counterpart chamber
of commerce in Africa, industry associations and private players in India and Africa, to develop
synergies for mutual development. FICCI has hosted several business and official delegations from
and to countries across the African continent. Focused interactions have been organised for better
mutual understanding of policy and market conditions in India and Africa at various levels.
FICCIs initiatives in Africa can be broadly classified as: Bilateral, Sectoral, Regional, Pan African
Bilateral: FICCI has set up bilateral institutional mechanisms called Joint Business Councils
(JBCs) with counterpart apex Chambers in all major African countries to facilitate business to
business interaction on a regular basis. Alongside the JBCs, FICCI signed MoUs with leading
chambers in Africa to promote Indo-Africa business interactions regularly. JBCs provide a variety
of business facilitation services by closely working with Government and business promotion
organizations in India and the respective partner countries. Joint Business Council Agreements
with African countries acted as a stepping stone to expand FICCIs activities from bilateral
dialogues to regional, sectorial and Pan-African business forums.
Sectoral: FICCI takes up sectorial initiatives in regular intervals. FICCI organises India-Africa
Hydrocarbons Conference biennially since 2007, in collaboration with Ministry of Petroleum and
Natural Gas, Govt. of India. FICCI organised India-Africa Agrifood Summits in 2007 and in 2008
with support from Ministry of Commerce & Industry and Ministry of Agriculture, Government of

India and The World Bank. Many other sectoral initiatives like Education Fairs, Water Summits,
Health Summits, etc. had been organized from time to time.
Regional: FICCIs regional initiatives include distinguished business events like Namaskar
Africa, India-Central Africa Business Forum etc. In Namaskar Africa, India exhibition and
Business Forums are organised. Supported by Ministry of Commerce and Industry, GoI, FICCI
organised Namaskar Africa, Kenya (FICCIs regional partners, East Africa Business Council
(EABC) and COMESA Business Council (CBC)) also joined hands in organising Namaskar
Africa, Kenya, in October 2010 and Namaskar Africa, Nigeria, in January 2010. Ministry of
Commerce joined hands with its JBC and MoU counterparts in Central Africa alongside the
Central African Development Bank for India-Central Africa Business Forum.
Similarly, FICCIs regional partner ECOWAS and JBC Partners in West Africa joined hands in
organising Namaskar Africa in Nigeria.
FICCI with the support of Pan-African: Supported by Ministry of Commerce & Industry &
Ministry of External Affairs, Government of India, FICCI organises biennial India-Africa Business
Partnership Summit. This pan-Africa initiative attracts ministerial and business delegations from
different African countries. FICCI is the institutional partner of Department of Industrial Policy
and Promotion (DIPP), Govt. of India in the latest pan Africa initiative India-Africa Business
Council. Announced during India-Africa Forum Summit II, this council is a mechanism to
strengthen and deepen economic ties between the business communities of India and Africa. Apart
from the above initiatives FICCI has joined hands in several trilateral and multilateral initiatives
like IBSA, Indo-US Collaboration in Africa and BRICS (FICCI Africa Desk, PP-3-5 ).
INDIA AND AFRICA COOPERATION ON ENERGY
Energy as an important component of trade
Energy co-operation is one of the important areas of economic partnership between India and
Africa. Indias economy is projected to grow at a rate of somewhere between 8% and 10%
annually over the next two decades and currently it is the fifth largest consumer of energy in the
world, accounting for some 3.7% of total global consumption. One-third of it comes from
traditional sources of fuel, including wood, dung, crop residue, biogas and waste.

(http://www.erewise.com/current-affairs/india-africarelation_art52389f9bbc565.html#.VpNSEfkrLIU)
Oil is a central commodity shaping the economic relationship between Africa and India Mining
and hydrocarbons are key drivers of Indian engagement in Africa. According to the Confederation
of Indian Industry (CII), based in South Africa, India is the worlds fifth largest consumer of oil
and will be in third place by 2030. As Indias population continues to rise and become wealthier,
energy consumption levels are predicted to double over the next two decades. (http://www.globalbriefing.org/2012/10/india-africa-trade-a-unique-relationship/
In order to diversify its energy sources, India is investing in energy assets overseas. Africas energy
resources are very significant for India. Currently, India gets over 70 percent of its oil from the
Middle East, with Saudi Arabia followed by Iran being their most important suppliers. However,
Delhi is now eager to diversify its portfolio of crude energy suppliers, mainly by boosting the
amount of oil it purchases from African countries. .( http://www.global-briefing.org/2012/10/indiaafrica-trade-a-unique-relationship/). Almost one quarter of Indias crude oil imports are sourced
from Africa. The Oil and Natural Gas Corporation Videsh Limited (OVL) has large overseas
investment of over in Sudan. It has also acquired stakes in Senegal and other African countries like
Cte dIvoire, Libya, Egypt, Nigeria and Gabon. (http://www.erewise.com/current-affairs/indiaafrica-relation_art52389f9bbc565.html#.VpNSEfkrLIU)
India also imports coal from South Africa. Indias imports of crude oil from Africa have increased
from 22 million tonnes in 2004-05 to over 35 million tons in 2010-11, according to
reports.Indian oil firms have also bought into oil exploration projects in Nigeria and Libya..(
http://www.global-briefing.org/2012/10/india-africa-trade-a-unique-relationship/)
Africas nuclear energy potential is also driving Indias interest in the region. Uranium mining,
essential to power Indias nuclear energy sector, is another area that has elicited great interest from
Indian companies, notes the CII. India is exploring uranium mining opportunities in Niger and
Namibia. (http://www.global-briefing.org/2012/10/india-africa-trade-a-unique-relationship/)
India is the forth largest consumer of oil in the world after US,China and Japan. India according to
International Energy Agency (IEA) ,due to the current growth rate ,India will have to increase its
energy consumption by atleast 3.6 percent annually .According to IEA, By 2025, India willtake
over Japan and be the world's thrid largest net importer of oil after United States AND China.India
is facing a number of challenges for its continous increasing demands for energy, so the Indian

government will have to follow a stratergy to meet the rising demands of oil and look for number
of options related to various energy sources.
India's foreign policy has two main aspects on energy bases abroad ,one is DIVERSIFICATION
and other is INVESTMENT.There are specific reasons which will show broader scope of oil and
gas import from Africa and investment in the country which are as follows(1)Africa's estimated oil reserves are small compared with the oil reserves in Gulf but the quantity
of the crude oil in Gulf of Guinea is sweet, light and low in sulfur contents, which makes it more
attractive .
(2) decreased transport costs and reduced risk of political violence as the african reserves and wells
are located offshore.
(3) sea lanes can be used for quick and cheap delivery and no need to build expensive pipelines.
(4)India will not be excessively dependent on the Middle East.
(INDIA'S QUEST FOR OIL AND GAS IN AFRICA:IS THERE ANY EASY WAY OUT?, BY
DR. SANJAY KUMAR PRADHAN, PP-2-3)
India on the other hand finds Nigeria as a potential energy power to meet India's energy
security.Nigeria is a OPEC member and has largest oil and gas reserves in Africa as well as is the
larges producer of oil in Africa. India and africa both of them are characterized by Demographic
boom ,rapid urbanization , apoor and ethnically diverse population and has vast economic
opportunities.In politicial factor, both the countries share commoness like have colonial legacies ,
parliamentary democrqcies witha federal system of government etc. Whereas in security
perspective both India and Africa have strong and powerful militaries. (INDO-NIGERIAN TIESGEOPOLITICS FOR ENERGY SECURITY AND CHALLENGES, DR. SANJAY KUMAR
PRADHAN ,PP-2-,3-4)
Oil and gas potentials of Africa and advantages for India
Africa is fast emerging as a important destination in the world energy map because of its rich
reserves. Libya, Nigeria , Angola and Algeria all are major energy hubs , according to BP
Statistical Review of World Energy ,2011. Apart from the major energy hubs , Cameroon is new
potential in Africa. The country Egypt in North Africa and Arab World is an important player in
Africa oil market. Whereas, Uganda is another new oil producer. Africa's population is smaller
than Asia, its per capita hydrocarbon resource at present is higher to some of the developing
countries in the world. At present, Africa meets around 16 percent of India oil needs. Algeria is the
first largest and Nigeria is the second largest Africa 's gas reserves, according to BP Statistical
review of world energy , 2011. In the 12th five year plan of India (2012-2017),OVL has set target

of over $12 billion investment abroad specially in Africa. In 2005 , Mittal Steel and ONGC
announced an investment of $6 billion to establish railways,power plant and refinery in Nigeria
through a joint venture company ONGC-Mittal Energy Ltd (OMEL).Apart from this, Essar , an
Indian private company has procured exploration and production in Nigeria. The Gas Authority
India Limited (GAIL) has entered into a joint venture with Egyptian Natural Gas Company
(NATGAS) with15% percent equity for gas distribution project in Egypt. GAIL has already
announced for looking a stake in a LNG plant in Nigeria and has been interested in setting up a
petrochemical plant in this country. In march 2006, India signed a MoU with Mauritius for
exploration of hydrocarbon deposists off the island nation's coast.(INDIA'S QUEST FOR OIL
AND GAS IN AFRICA:IS THERE ANY EASY WAY OUT?, BY DR. SANJAY KUMAR
PRADHAN, PP 5-6)
India's crude oil output has been stagnant since 2000 but demand for products like gasoline and
diesel for which India is building refineries to meet its fast growing economies is increasing.
Nigeria is the second largest crude oil producer in Africa. Indian companies prefer to buy cheaper
heavy sour crudes that their refineries are capable of processing. India's refineries are increasing
imports from West Africa and Latin American regions. Nigeria's crude oil is sweet, light has good
gasoil yield and has premium value in the international market and attracts Indian companies. India
is the single largest consumer of Nigerian crude oil , replacing the US from the top position
(TANEJA ,2013).The Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited
(BPCL), Hindustan Petroleum Corporation Limited (HPCL) are some buyers of Nigerian crude.
Trade Diplomacy
The first India-Africa summit was held in April 2008, where 14 African heads of state and leaders
of eight African regional groups gathered in New Delhi, with their Indian host, Prime Minister
Manmohan Singh. The hallmark of the summit was that India offered $5.4 billion credit to Africa,
and it marked the zenith of India-African cooperation following intensified cultural, political and
economic interactions between India and African countries. The second Africa-India Forum
Summit held in Addis Ababa from May 20 to May 25 2011, saw the Indian government take
significant steps towards building ties with Africa. Main focus was on trade and development,
India also offered $5 billion of credit over three years and increased development aid for Africa
projects making a statement that India is continuing to engage with Africa seriously.
Indias development assistance is totally linked to its own capabilities and its interests in Africa,
and it mainly targets African countries rich in resources or rich in Indian diaspora. Indias

development cooperation uses aid to facilitate other financial flows, technical assistance, few
grants, export credits, debt relief and unilateral zero-tariff access for African products. India also
refrains from the use of political and economic conditionalities in its development cooperation
programme. The third summit promises to be a milestone and is much bigger and grander than
the two previous summits held in New Delhi (2008) and Addis Ababa (2011) .because this is the
first time India is inviting the leaders of all 54 African countries to the forum summit. In this
respect, the 2015 summit marks a new beginning as previously the participation of African leaders
in the summit process was done on the basis of the Banjul formula, which included

the

participation of the leaders of around 12-14 African countries, who were represented at the summit
in their capacity as the chiefs of the Regional Economic Communities (RECs). Third summit is
expected to raise the bar and will build upon substantive outcomes and plans outlined in the 2008
New Delhi Declaration and 2011 Addis Ababa Declaration and Africa-India Framework for
Enhanced Cooperation, the all-encompassing documents that serve as templates for expanding this
mutually enriching partnership revolving around enhanced trade, capacity-building and training.

India can rightly claim that it has an edge over other developing countries in education,
information and technology, and technology for tailor-made small and medium enterprises. It can
impact African development through technology and skills transfer leading to human capital
formation under the aegis of NEPAD rather than just providing financial aid and extended lines of
credit. For instance in Uganda, Indian technology led to nearly three times more electricity to be
generated, from 300 MW to 1000 MW than had been planned at Karuma project. Another sector
where Africa can benefit tremendously is health care and pharmaceuticals where the Indian
government and private enterprises can be major players. India also provides a different model of
development- a model of pluralistic, multicultural, democratic setup that suits the African counties
with their myriad ethnic, linguistic, religious and tribal divisions.
Africa is worlds least developed countries which lack infrastructure such as adequate roads, ports
and airports. This makes initial deployment and subsequent movement a major challenge. Natural
disasters and war have further degraded the continents already poor deployment conditions while
diseases, including cholera, HIV/Aids and malaria are also a major concern. Despite these
problems, India has proved to be a reliable partner. Professional excellence of the Indian troops
and the Indian contribution has been acknowledged and commended by many African political and

social leaders. The reasons for Indias involvement in UN peacekeeping operations in Africa are
the de-escalation of conflict, creating an atmosphere suitable for safeguard of its national interest.
India and Africa can also cooperate on piracy of the coast of Somalia.
Indian Technical & Economic Cooperation Programme (ITEC)
India poses skilled manpower and technology more appropriate for development in poor countries
around the world for this purpose India started the Indian Technical and economic cooperation
(ITEC).this programme has helped to strengthen the administration and economy of infrastructure
projects. India was the first Asian country to become a full member of the African capacity
building foundation and committed a million dollar $ to build capacity for poverty alleviation and
sustainable development in Africa.
TEAM 9 and LOCS
The government of india and 8 west African country- Chad, Burkina faso, Ghana, Mali, Senegal,
Coteds Ivoire, Equatorial Guinea , Guinea Bissau have a regional cooperation called
technoeconomic approach for Africa india movement. Its aim is to evolve a strong bond through
the development of greater economic institutional linkage and partnership in trade and industry.the
economic importance of team 9 to india lies in the oil reserves of the gulf of Guinea consisting
70% of africas oil production.
IBSA- a trinity of international trade
The India Brazil South Africa dialogue on economic imperatives formulates agenda of cooperation
in the spirit of south south cooperation. According to (UNCTAD)United nations conference on
trade and development , the trilateral forum is a gateway for intensing intercontinental trade and
investment link. The trinity of counter reinforces each others economic strength by heating
marketing of 1.5 billion people. India

south Africa trade similarity grew on an extensive

rate.morever indian companies in the automotive and pharmaceutical sector have already invested
heavy in brazil and south Africa. Tata and Mittal steel have made large investment in south
Africa..South Africa has the most advanced banking and insurance system in sub sahara Africa
and plays a major role in the region within an international level of competitiveness.An MoN on
biofuel has been signed between the 3 countries to create trilateral task force on bio fuels on
concrete areas of common interest.
Other Areas of Economic Concerns and Cooperation
To counter piracy, a working group has been set up to look into the economics of piracy and three
ships of the Indian Navy patrol the Gulf, the Arabian Sea and the area near Seychelles at any given

time. Moreover, India and Africa can jointly undertake active and aggressive patrolling, make the
Djibouti Code of Conduct as legally binding as possible, make payment of ransom illegal, look at
modalities of prosecution and expand capacities within the prisons. India and countries in Africa
share similar challenges of dealing simultaneously with energy security, climate change and socioeconomic development. Given that India and Africa will be one of the most vulnerable to the
negative impacts of climate change and its variability, decision-makers in India and Africa are
beginning to cooperate at a myriad of levels. It would be nave to expect countries to be driven by
anything less than domestic stakeholders, national interests and local realities, but it is understood
that they co-operate on mitigation, adaptation, on further improving projections and predictions of
climate change data, deforestation and incentive mechanisms for best practice, technology transfer
(especially renewable sources of energy of which India is a major producer) and capacity building,
and to cope with insecurity and climate-related development challenges. This will enable India
and Africa to arrive at a multilateral agreement that is equitable and represents the development
concerns of the developing world.
Indias foray in Africa has led to improved impact on the terms of trade for raw materials
especially oil, coal, metals and minerals. This has led increased prices for commodities.
Consequently, African countries have greater export earnings and higher growth rates. Africa has
been growing at approximately 6% for the last five years and provides a huge market for Indian
manufacturing goods like textiles, pharmaceuticals, light machinery, transport vehicles like trucks.
Indias relations with Africa are time-tested and historical. However, in recent years the affiliation
has been revitalised. Both continuity and change feature in Indias evolving relations with Africa.
Indias foray into Africa may be seen as a continuation of the past trend of supporting weaker
allies. India and Africa can cooperate with each other. The cooperation should have a positive
impact on the development aspects of India and Africa. http://blogs.lse.ac.uk/ideas/2012/04/indiaand-africa-towards-greater-cooperation-and-growth/) Terrorism is challenge the proliferation of
terrorist and extremist groups in the continent like Al-Qaeda in the Maghreb, Nigeria-based Boko
Haram, and Al-Shabaab and their suspected links with militants in other parts of the world entails a
more proactive collaboration between India and Africa on the issue of terrorism. Looking ahead to
the next stage in the India-Africa partnership, one can, therefore, expect a deepening of security
cooperation across a spectrum of areas, including terrorism, piracy, and maritime security.
Challenges

It has been observed that though the trade relationship between two countries is improving,
however, there are some of the hindrances that are faced by the business firms in both the
countries. High transaction costs due to exporting goods from India to Africa have been a major
impediment for Indian exporters. The shipping and insurance costs keep on increasing, which is
why, Indian exporters prefer to sell on on delivery basis. Secondly, Small and medium
enterprises in India, accounting roughly 40% of total Indian exports are unaware about the
developments of Africa. So a need has been felt to update the knowledge about the African market
among the Indian business market-both large and small. Moreover, getting work permit/visa is
particularly difficult in some of the African countries .This create hurdle for the employees who
want to work in Africa. Some of the other hurdles impeding Indian investments in Africa that has
been observed as access to capital; absence of bilateral investment treaties; and, smaller market
size] (International Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014
3 ISSN 2250-315, PP-1-7, www.ijsrp.org).
Some of the challenges are Internal disturbance, adverse impact on ecosystem ,china factor, etc.
Oil producing states of Niger DELTA had militant groups and gangs which continued to attack
foreign and domestic oil and gas installations causing significant disruption to the countries level
of production. Nigeria's potential output has been reduced to 20 percent from 25 percent since the
violence in the delta region.High unemployment , environmental degradation, lack of basic
resources such as electricity , fresh water etc were also the main problem.
The effect of bunkering and oil pollution has caused serious damage to the ecosystem. Not just
there is a damage to the ecosystem there is also impact on livelihood, oil production , and loss of
revenue to the government. This destruction has been faced by Niger Delta because of which
generation yet unborn will feel the impact.
The fast growing China is looking for investment and diversification in search for more and more
oil and gas abroad. China doesnt care about politics or civil society for China it is purely business.
Nigeria needs pratical and feasible solutions that will harness the abundant energy resources that
will benefit the country. There is a lot of proportion of oil and gas energy which is not in a usable
condition. Nigeria is one of the world's major net exporters of energy resources and has a GDP
growth rate of 7.76 percent in 2012 (Central bank of nigeria, www.tradingeconomics.com) .

Steps to promote cooperation


(1) There is a need of cooperation on basic needs ,for example India is in need of energy sources
for the development of its economy while Nigeria needs skill and capital for the development.
(2) There is a need to stop unwanted acts of destruction by bunkering , militant activities etc.
(3)There is a oil and gas market, competition is there so China shall not be counted as an exception
to India in Africa.
CONCLUSION
Inspite of various challenges as described above there is a great hope for a strong bilateral and
multilateral cooperation between India and Africa in the energy sector.
Positive relationship between India and Africa can reshape the rising energy needs of India. India
-Africa hydrocarbon and echibition, India-Africa Forum Summit level meetings, ITEC programme
, TEAM-9 initiatives, NEPAD, BRICS ,IBSA etc,are different platforms which shows increase in
trade and diplomatic relationship between India and Africa.
India- Africa partnership will help African countries to achieve their millennium development
goals. Moveover , the partnership between India and Africa will help African countries to gain 'A
great deal from India's experience in poverty reduction , economic development , rise of missle
class in African region etc. There are the narratives of a rising India and Afro-optimism are set to
intersect, and impart a fresh resonance to the emerging vocabulary of the multi-faceted IndiaAfrica engagement. The increasing convergence of interests, values and a burgeoning web of winwin opportunities will be crystallised in the third India-Africa Forum Summit New Delhi will host
later this year. This will be the first India-Africa summit to be hosted by the Narendra Modi
government, and will reflect the mantra of "skill, scale and speed in dynamic and evolving
relations between the two growth poles of the world.
Unfolding Resurgence
The context of the third summit fuels hopes of a marked upswing in the quality and quantum of
the variegated India-Africa relations..The world is betting big on the India growth story,. On the
other hand, the African continent has been quietly and incrementally scripting a new chapter of
economic resurgence, triggering a healthy competition. Africa has decisively shed the stereotype of
a "Hopeless Continent and become a "Cape of Good Hope, with six of the worlds fastestgrowing economies located in in Sub-Saharan Africa. The emergence of a new generation of

quality-conscious middle class consumers has enhanced the attractiveness quotient of both Africa
and India. The India-Africa trade is estimated to be around $70 billion, and if the current optimistic
trends are anything to go by, the two sides should be able to ramp up their bilateral trade to $100
billion

in

the

Development

next

of

2-3
the

years.
Partnership

Since both India and Africa launched an ambitious and multi-layered summit process in the
summer of 2008, India has pledged over $8.5 billion in Lines of Credit for a wide array of
development projects across the emerging continent. Over 65 per cent of this soft loan package has
already been disbursed. Going by past record, the new Indian government is expected to announce
an ambitious multi-billion dollar developmental package at the New Delhi summit in 2015. In a
signature initiative, India is also in the process of delivering on its promise of setting up over 100
training institutes in different African countries, encompassing a wide array of areas ranging from
agriculture, rural development and food processing to information technology, vocational training,
English language centres, and entrepreneurial development institutes.
Knowledge

Power

Many countries may have higher bilateral trade with Africa, but what sets apart Indias engagement
with Africa is its focus on innovative capacity building programmes and the deployment of ICT,
the countrys forte, to help build a knowledge economy in the African continent. The Make in India
and Digital India missions, launched by the Modi government, will also have ripple effects in its
outreach

and

diplomacy

in

Africa.

Third Summit: possibilities and global governance


The third India-Africa Forum Summit is, therefore, poised to be more than a showpiece diplomatic
event, celebrating the enterprise and energies of the two regions; it will be an occasion for
reviewing as well as creating new roads and pushing the envelope to harness new opportunities..
Besides bilateral issues, the India-Africa equations will also impact the contours of an emerging
world order. As the UN celebrates its 70th anniversary, India and Africa should join hands to
fructify the long-deferred dream of the reform and expansion of the UN Security Council, with

seats for both New Delhi and the African continent in a reformed world body.
(http://www.mea.gov.in)
International Relations
The fourth BRICS Summit

held in New Delhi, India on March 29 2012 is set to further

consolidate the role and importance of this South-South grouping in international affairs. Amongst
the many issues confronting, Brazil, Russia, India, China and its newest member South Africa,
perhaps none has quite the resonance of Africa.. For India in particular, the long history of
engagement has given its engagement a particular depth and meaning lacking in most of the other
BRICS countries (with the notable exception of South Africa).
Indias relations with African countries date back centuries, and with varying degrees of
importance. Africa has been part of Indias foreign policy since independence in 1947. India-Africa
trade increased from $967 million in 1991 to more than $9.5 billion in 2005. From 2000 to 2009,
Indian exports to Africa increased from $2 billion to $14.813 billion, and imports from India to
Africa increased from $3 billion to $24.728 billion. Indias official foreign direct investment in
Africa in 2008 was $2 billion.Indias trade with Africa almost doubled to 7.7 per cent of its total
trade between 1990/1 and 2006/7 in contrast to Chinas current 3 per cent. Thus, Africa is
proportionately a more important trading partner for India than for China.
The footprints of Indian private sector and public sector enterprises can be seen in Africa. For
instance, major private sector enterprises are Tata, Mahindra and Mahindra, Ranbaxy Laboratories,
Fortis, Vedanta, Kirloskar Brothers Limited, Bharti Airtel Communications, Essar Group, Ashok
Leyland, Larson and Toubro, NIIT Technologies, Karuturi Global, Escort, Apollo Hospitals to
name a few. Indian public sector enterprise like Oil and Natural Gas Corporation Videsh Limited
(OVL), Indian Telecom Industries, Rail India Technical and Economic Services (Rites), Konkan
Railways, Bank of Baroda and many others are also very active in Africa.
Indias partnership with Africa extends beyond BRICS, and includes two other sub-groupings that
are also used in the context of Africa: India-Brazil-South Africa Dialogue Forum (IBSA) and the
BASIC group comprising Brazil, South Africa, India and China (BASIC) as well as the continental
India-Africa summitry process.
Assessment of India Africa partnership-Politics
The view that Africa has been influenced by politics and prejudicetrue assessment has been
blinded by political conflicts, cinematic depiction of savagery and frequently coloured by imagery
of a dark continent inhabited by huddled masses.
The truth is 21 countries in Africa have a higher per capita income than Indiacitizens in eight
countries enjoy incomes four times that of Indians. Between 2008 and 2013, 9 countries grew

faster than India. With a population of a billion-plus, Africa is a market of tremendous


consequence. It is home to 30 per cent of all minerals found in the world. The US Geological
Survey estimates over 14 billion barrels of gas and 250 trillion cubic feet of gas reserves in coastal
Africamore than that in UAE and Venezuela. Indiaa net importer of fuel and consumer of rare
mineralscan scarcely afford to ignore the alternate view of the continent.
Partnership with Africa is an idea that visited India in the past and escaped success. Indias
engagement with Africa was anchored more in political rhetoric and less in strategic realismits
history is littered with notions of civilizational connections, acronyms like NAM, phraseology of
south-south cooperation.
In the post-globalisation era, India renewed its effort to reconnect with the idea. It set up an
institutional mechanism to propel the partnershipthe India Africa Forum Summit. The first
summit held in Delhi in 2008 had loads of win-win rituals but little action.. As earlier the intent
was left unfuelled for lift off, perhaps because Indias economy was mired in its biggest crisis since
1991. The question, therefore, is will India be third time lucky?
This week India is hosting the third India Africa Forum Summit in New Delhi. Typically, the Modi
Sarkar has gone all out and persuaded participation of all 54 African countries of which 40 are at
the level of head of state or head of government. The effort to repair the mistakes of the past
though will require more than just participation.
Like it or not, Indias efforts to engage with Africa will be compared with the two existing
hyphenationsthe US-Africa Leaders Summit and Forum on China-Africa Cooperation.
Strategy is as much about what not to do as it must be about what should be done. The Chinese
have built power projects in Zambia, airport in Mozambique, railways in Nigeria and the African
Union building in Addis Ababa. It is estimated that Chinas Export Import Bank has lent more
money in a decade than the World Bank. India lacks the resources to practice cheque-book
diplomacy. It also cannot afford the epithets of coloniser or a reputation for coercive commercial
deals. Sure, Africans know Ni Hao means hello but they are also seething at the use of the
pejorative Hei Ren (black people) by the Chinese workers.
The US, on the other hand, is deploying a model of coalitionsa kind of multi-nation, multiinstitution partnership. Take power. Over 650 million Africans do not have access to power and the
Obama administration identified this as one focus area. It created Power Africaa coalition of
World Bank, African Development Bank, the EU, the UN, 12 US government agencies and over
100 companies.
India needs to author a template that is sustainable and based on equity. The primary approach
must be about sharing capability and capacity to create partnerships to deliver solutions.For

instance, India needs fertilisers. Morocco has phosphate reserves, Gabon has gas. Why not set up a
fertiliser plant in Africa for India? If Make in India is to succeed, India will need to carve a share
of Africas consumption story. This requires expansion and setting up overseas facilitiesby automakers, pharma giants, and consumer goods makers.
India has much to share and It is emerging as a major centre for renewables. Africa needs power
renewables and off-grid solutionsand India has the expertise. With a land mass of over 30
million sq km, Africa could well be the food basket of the future. India could help with yield
improvement and dairy development. It could also site farms for strategic reserves of perennial
imports like oils and pulses. Between now and 2050, the highest growth in working age population
will be in India and Africa.. India can set up and train manpower.
Yes, India will be hard put to find resources to fund the initiatives. It must leverage its membership
of the BRICS Bank. It must seek partnerships with Japan and the US. It is also an opportunity to
create a sovereign fund. More importantly, it needs a dedicated cadre to promote economic
diplomacy.
The narrative about India among the countries in Africa is rife with unmet expectations and failed
opportunities. A 2008 proposal for a power project was delayed till 2011 for clearances and the
promised credit-line to fund the project. Without exception most complaints are about the slow
administrative process that stalls potential.
Identity and credibility is established on delivery, not promises. The perception of no-show or one
of poor show must be erased. Success in geo-politics demands India must invest in the culture of
outcomes.
(http://www.newindianexpress.com/columns/shankkar_aiyar/The-India-Africa-Partnership-IdeaThird-Time-Lucky/2015/10/25/article3095738.ece)

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